The shipping industry must adopt a transparent, proactive approach to corporate governance or else risk exposure to business and reputational damage, according to the international accountant and shipping adviser Moore Stephens.
Corporate governance in shipping has been in sharp focus recently, particularly following publication of the research by Wells Fargo Securities into Shipping’s Corporate Governance War.
Businesses in today’s shipping industry are expected to fully comprehend the implications of inadequate management of conflict of interest arrangements, and to recognise the importance of independent directorship, Robert Noye-Allen, a partner in the Moore Stephens Governance Risk & Assurance team, said.
He added that, for example, the UK Corporate Governance Code stipulates that at least half the board of directors, excluding the chairman, should comprise non-executive, independent directors.
“Independent directorships and good practice can facilitate the disclosure of actual and perceived conflicts in reports issued to stakeholders, and ensure that calls for declarations of interest are a standard board meeting agenda item,” Noye-Allen said.
Furthermore, Noye-Allen said that a nominated individual should be responsible for regularly scrutinising the register, and an escalation process should be put in place for managing concerns. Also, as part of wider risk management, a periodic independent review should be undertaken of the register of interests.
“These steps are an excellent way to inspire stakeholder and investor confidence in board transparency. Any shipping businesses which do not follow them should reflect that it is far better to disclose than to be exposed to potential reputational and share value damage,” he added.